Statutory Working Hours vs. Contractual Working Hours
Statutory & Contractual Working Hours
What are statutory and contractual working hours?
- Statutory 40 hours a week and 8 hours a day, with contracted hours set within those limits
- Overtime requires agreement and stays within the legal cap
- Whether waiting time counts as working time is a frequent source of disputes
The number of contractual working hours you write down is not a simple wording choice. It sets the denominator of your pay calculations. The hourly rate based on ordinary wages is the monthly ordinary wage divided by monthly contractual hours. With 8 hours a day and 40 hours a week, adding 8 paid weekly-holiday hours gives (40+8)×365÷7÷12, the familiar 209 hours a month. If a contract says 7 hours a day, the denominator drops to the 183-hour range and the hourly rate rises. Overtime, night and holiday premiums, unused annual leave pay, and the average wage used for severance all move with that number.
The gap between the two gives rise to what is called overtime within the statutory limit. If an employee whose contracted hours are 7 per day works one extra hour, the company pays only 100% of the ordinary hourly wage, with no premium, up to 8 hours. The 50% premium applies once 8 hours are exceeded. For part-time employees, the opposite holds: work beyond contracted hours earns a premium even if the day totals less than 8 hours, and overtime is capped at 12 hours per week. Annual leave is likewise determined by full attendance on contracted working days, not by statutory working hours.
Where the boundary blurs is usually where working hours start and end. Changing into a uniform, morning briefings, handovers, travel between client sites, and company-mandated training count as working hours if the employer directed or supervised them. Conversely, break time is only break time if employees are free to use it as they wish. If staff are told to answer phones and stay at their desks, it is working time in substance even when the books call it a break.
Three points break down most often in practice. First, the misconception that a comprehensive wage contract lets you assign any number of hours. In fact, a comprehensive wage is only a calculation method; it does not lift the 12-hour weekly overtime cap. Second, the belief that the 52-hour week can be met on a monthly average. Unless a flexible or elective working-hours system has been formally adopted, the unit of assessment is always one week. Third, the contractual hours differ from the actual work schedule. After a few years in that state, the hourly rate itself turns out to have been wrong, and you end up retroactively settling three years of overtime pay and severance differences all at once.
Inwoo LeeLeadership, communication, and performance management expert
Jongmu KimCorporate talent development and job skills expertThe Labor Standards Act sets 40 hours a week and 8 hours a day as the standard working time, and allows up to 12 additional hours a week by agreement between the parties (Articles 50 and 53). Break time is excluded from working hours, and whether waiting time counts as working time depends on whether the employee is under the employer’s direction and supervision.
Consider a hypothetical case: Company A runs two logistics centers in southern Gyeonggi Province. Of its 240 employees, 180 work on-site in two shifts, day and night, and annual revenue is about KRW 48 billion (≈ US$35,912,000). Last month a former employee filed a complaint with the labor office arguing that waiting time is also working time, which kicked off a three-month review of working hours.
- The HR director pulled 180 shop-floor contracts and checked them against the shift schedule. The contracts said '8 hours a day,' but actual shifts ran 9 hours. In the meeting, someone asked, 'So what have we been using to calculate hourly pay all this time?'
- A labor-affairs manager cross-checked 12 weeks of gate entry records against WMS work logs. They found an average of 46.5 hours a week, and that in three peak-season weeks five employees had exceeded 52 hours a week.
- When inbound trucks backed up, the team lead told workers 'don’t leave your post, stand by.' The company recognized those 40–50 minutes a day as working time and paid the last six months retroactively, averaging KRW 380,000 (≈ US$285) per person.
- The company found that 32 afternoon-shift part-time employees (20 hours a week) had been working 2–3 extra hours on busy days for base hourly pay only, so it recalculated their pay with a 50% premium on all of the excess hours.
- The company absorbed KRW 27.4 million (≈ US$20,500) in retroactive pay and a 1.8% rise in monthly labor costs, but the complaint was withdrawn by agreement. Over the next six months there were zero cases of exceeding 52 hours a week, and wage-related objections fell from 7 a quarter to zero.